Ukraine’s National Bank Warns About Bitcoin

Ukraine’s National Bank Warns About Bitcoin

On October 2 the National Bank of Ukraine warned regional banks and executives of the certain risks using virtual currency. This comes after previous warnings in 2014 with the financial institution giving similar warnings. Due to the Bitcoin conference in Kiev many in the banking community have seen a surge of interest in the digital currency. This newly found enthusiasm can be seen with many participants at conferences and meetings held amongst the Ukrainian banking crowd.

This news also comes after the National Bank of Ukraine invited PayPal, Apple Pay, and Google Wallet to their regional markets. When regulators had said they would facilitate the tech giants into the Ukrainian payment system, they also were looking into the regulation of Bitcoin. The Ukrainian equivalent of the BitLicense was drafted by the Bitcoin Foundation Ukraine during the time the National Bank Council investigated PayPal and other processors.

According to the National Bank at present, the international financial institutions and collaborative banking industry have not coordinated approaches to cryptocurrencies. However at this same time members of the central banking committee and business executives are attending the International Forum of retail payments initiative of the World Bank. This includes the Market Infrastructure Committee and International Settlements discussing and monitoring the digital currency with government officials.

The warnings disclosed may have been caused by the September 30th announcement from Russian regulator Artyom Sychev, who said five banks in Russia were targeted with extortion letters. The messages sent to the banks threatened DDoS-attacks, but according to Sychev he pre-warned banks of the planned attacks and financial institutions were able to avoid the threats. The hackers extortion notes asked for 50 bitcoins (per bank) to be sent to their wallets, and they would cease the attack. Sychev, The Deputy Director of Security and Information, told Ukrainian press:

“Last Saturday’s monitored channels, we have received information that, obviously, several major lending institutions will be attacked. We promptly contacted them, given the possible details of how the attack will take place, “- said Sychev.

Experts at the World Bank want to watch this type of payment instrument for competency, and calculation. The National Bank and various banking groups believe the “Virtual currency schemes” need further analysis. The banks don’t express which way they truly feel about Bitcoin, but the warned of potential risks within the digital environment. The Ukrainian bank believes new members entering the cryptocurrency market should first provide security payments. The bank has not revealed on whether or not they will implement these policies or any at all for that matter.

Do you think Ukrainian Officials will allow Bitcoin to progress in the region? Let us know in the comments below.